Renewable Heat Incentive (RHI)

Heating the nation’s homes is responsible for 47% of the UK’s total carbon dioxide emissions. By 2020 the Government aims to increase the amount of heat generated by renewables from the current 0.6% to 20%.

The Government hopes that the Renewable Heat Incentive (RHI) will make a major contribution to achieving this target.

To meet the 2020 15% renewable energy target, DECC need to develop new ways of generating renewable energy in all sectors, including heat. On 20 October 2010, as part of the Spending Review, the Chancellor announced that the Renewable Heat Incentive (RHI) will be launched in June 2011

Renewable Heat incentives will start in 2011

Anticipated to start Summer 2013, the RHI will guarantee long-term payments for installers of solar thermal, ground source heat pumps, biomass boilers and other renewable technologies. It will apply to heating at all scales, from households to public sector buildings to industrial processes in factories.

RHI will replace the grants previously available through the Low Carbon Buildings Programme, helping to reduce the cost of solar thermal.

Payments will be made either on the exact amount or the estimated amount of heat produced (meters will be necessary in the former case). They are likely to result in a 6% rate of return for solar thermal.

The consultation period ended on 26th April. The new coalition government has yet to confirm whether the scheme will be introduced as planned under the previous government. Details of the funding of the scheme - whether through general taxation or via a levy imposed on the sale of fossil fuels – have yet to be announced.

Solar thermal is a proven technology which has been around for many years, but the RHI, a ‘world first’, will make it more affordable and provide a boost for locally-produced clean energy in the UK .